<PAGE>

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                          ---------------------------

                                    FORM 10-Q

        [X]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2003

                                       OR

        [ ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

             FOR THE TRANSITION PERIOD FROM _________ TO __________

                            -----------------------

                         COMMISSION FILE NUMBER 33-03094

                            ------------------------

                         THE TRAVELERS INSURANCE COMPANY
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                 CONNECTICUT                                 06-0566090
         (State or other jurisdiction of                 (I.R.S. Employer
         incorporation or organization)                  Identification No.)

                 ONE CITYPLACE, HARTFORD, CONNECTICUT       06103-3415
               (Address of principal executive offices)     (Zip Code)

                                 (860) 308-1000
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                             Yes [X]       No[ ]

Indicate by checkmark whether the registrant is an accelerated filer (as defined
in Rule 12b-2 of the Exchange Act).

                             Yes [ ]       No[X]

As of the date hereof, there were outstanding 40,000,000 shares of common stock,
par value $2.50 per share, of the registrant, all of which were owned by
Citigroup Insurance Holding Corporation, an indirect wholly owned subsidiary of
Citigroup Inc.

                            REDUCED DISCLOSURE FORMAT

The registrant meets the conditions set forth in General Instruction H(1)(a) and
(b) of Form 10-Q and is therefore filing this Form 10-Q with the reduced
disclosure format.

<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                          Page
                                                                                                                          ----
<S>                                                                                                                       <C>
PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

Condensed Consolidated Statements of Income for the
three and six months ended June 30, 2003 and 2002 (unaudited).........................................................      3

Condensed Consolidated Balance Sheets as of June 30, 2003 and December 31, 2002 (unaudited)...........................      4

Condensed Consolidated Statements of Changes in
Shareholder's Equity for the three and six months ended June 30, 2003 and 2002 (unaudited)............................      5

Condensed Consolidated Statements of Cash Flows for the
six months ended June 30, 2003 and 2002 (unaudited)...................................................................      6

Notes to Condensed Consolidated Financial Statements (unaudited)......................................................      7

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS........................     14

ITEM 4.  CONTROLS AND PROCEDURES......................................................................................     22

PART II - OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.............................................................................     23

Signatures............................................................................................................     24

Exhibit 31.01.........................................................................................................     25

Exhibit 31.02.........................................................................................................     26

Exhibit 32.01.........................................................................................................     27
</TABLE>

                                       2

<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)
                                 ($ in millions)

<TABLE>
<CAPTION>
                                                       THREE MONTHS ENDED      SIX MONTHS ENDED
                                                             JUNE 30,              JUNE 30,
-----------------------------------------------------------------------------------------------
                                                        2003        2002       2003      2002
                                                        ----        ----       ----      ----
<S>                                                   <C>         <C>        <C>       <C>
REVENUES
Premiums                                              $   498     $   540    $   966   $   960
Net investment income                                     751         734      1,515     1,425
Realized investment gains (losses)                         (1)       (182)         2      (156)
Fee income                                                144         141        289       285
Other revenues                                             29          27         56        54
----------------------------------------------------------------------------------------------
     Total Revenues                                     1,421       1,260      2,828     2,568
----------------------------------------------------------------------------------------------

BENEFITS AND EXPENSES
Current and future insurance benefits                     439         469        854       850
Interest credited to contractholders                      314         301        622       583
Amortization of deferred acquisition costs                121          98        245       173
General and administrative expenses                       111          91        222       195
----------------------------------------------------------------------------------------------
     Total Benefits and Expenses                          985         959      1,943     1,801
----------------------------------------------------------------------------------------------
Income from operations before federal income taxes        436         301        885       767
----------------------------------------------------------------------------------------------
Federal income taxes                                      121          79        209       224
----------------------------------------------------------------------------------------------
Net Income                                            $   315     $   222    $   676   $   543
==============================================================================================
</TABLE>

            See Notes to Condensed Consolidated Financial Statements.

                                       3

<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)
                                 ($ in millions)

<TABLE>
<CAPTION>
                                                                                      JUNE 30, 2003   DECEMBER 31, 2002
------------------------------------------------------------------------ ----------------------------------------------
<S>                                                                                   <C>             <C>
ASSETS
Investments (including $2,388 and $2,687 subject to securities lending agreements)        $54,980         $50,809
Separate and variable accounts                                                             23,772          21,620
Reinsurance recoverable                                                                     4,379           4,301
Deferred acquisition costs                                                                  4,126           3,936
Other assets                                                                                2,820           2,329
------------------------------------------------------------------------ ----------------------------------------------
     Total Assets                                                                         $90,077         $82,995
------------------------------------------------------------------------ ----------------------------------------------

LIABILITIES
Contractholder funds                                                                      $28,520         $26,634
Future policy benefits and claims                                                          15,318          15,009
Separate and variable accounts                                                             23,772          21,620
Deferred federal income taxes                                                               2,142           1,448
Other liabilities                                                                           7,032           6,649
------------------------------------------------------------------------ ----------------------------------------------
     Total Liabilities                                                                     76,784          71,360
------------------------------------------------------------------------ ----------------------------------------------

SHAREHOLDER'S EQUITY
Common stock, par value $2.50; 40 million shares authorized, issued and outstanding           100             100
Additional paid-in capital                                                                  5,444           5,443
Retained earnings                                                                           6,151           5,638
Accumulated other changes in equity from nonowner sources                                   1,598             454
------------------------------------------------------------------------ ----------------------------------------------
     Total Shareholder's Equity                                                            13,293          11,635
------------------------------------------------------------------------ ----------------------------------------------

     Total Liabilities and Shareholder's Equity                                           $90,077         $82,995
=======================================================================================================================
</TABLE>

            See Notes to Condensed Consolidated Financial Statements.

                                       4

<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
      CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
                                   (UNAUDITED)
                                 ($ in millions)

<TABLE>
<CAPTION>
                                                                           THREE MONTHS ENDED      SIX MONTHS ENDED
                                                                                JUNE 30,                JUNE 30,
----------------------------------------------------------------------------------------------------------------------
COMMON STOCK                                                                  2003        2002        2003        2002
----------------------------------------------------------------------------------------------------------------------
<S>                                                                       <C>         <C>         <C>         <C>
Balance, beginning of period                                              $    100    $    100    $    100    $    100
Changes in common stock                                                          -           -           -           -
----------------------------------------------------------------------------------------------------------------------
Balance, end of period                                                    $    100    $    100    $    100    $    100
======================================================================================================================

----------------------------------------------------------------------------------------------------------------------
ADDITIONAL PAID-IN CAPITAL
----------------------------------------------------------------------------------------------------------------------
Balance, beginning of period                                              $  5,444    $  5,464    $  5,443    $  3,864
Stock option tax benefit                                                         -           2           1           6
Capital contributed by parent                                                    -           -           -       1,596
----------------------------------------------------------------------------------------------------------------------
Balance, end of period                                                    $  5,444    $  5,466    $  5,444    $  5,466
======================================================================================================================

----------------------------------------------------------------------------------------------------------------------
RETAINED EARNINGS
----------------------------------------------------------------------------------------------------------------------
Balance, beginning of period                                              $  5,935    $  5,192    $  5,638    $  5,142
Net income                                                                     315         222         676         543
Dividends to parent                                                            (99)       (157)       (163)       (428)
----------------------------------------------------------------------------------------------------------------------
Balance, end of period                                                    $  6,151    $  5,257    $  6,151    $  5,257
======================================================================================================================

----------------------------------------------------------------------------------------------------------------------
ACCUMULATED OTHER CHANGES
IN EQUITY FROM NONOWNER SOURCES
----------------------------------------------------------------------------------------------------------------------
Balance, beginning of period                                              $    835    $   (189)   $    454    $     74
Foreign currency translation, net of tax                                         -           1           2           2
Unrealized gains (losses), net of tax                                          763         232       1,112         (80)
Derivative instrument hedging activity gains (losses),
    net of tax                                                                   -         (46)         30           2
----------------------------------------------------------------------------------------------------------------------
Balance, end of period                                                    $  1,598    $     (2)   $  1,598    $     (2)
======================================================================================================================

----------------------------------------------------------------------------------------------------------------------
SUMMARY OF CHANGES IN EQUITY
FROM NONOWNER SOURCES
----------------------------------------------------------------------------------------------------------------------
Net income                                                                $    315    $    222    $    676    $    543
Other changes in equity from nonowner sources                                  763         187       1,144         (76)
----------------------------------------------------------------------------------------------------------------------
Total changes in equity from nonowner sources                             $  1,078    $    409    $  1,820    $    467
======================================================================================================================

----------------------------------------------------------------------------------------------------------------------
TOTAL SHAREHOLDER'S EQUITY
----------------------------------------------------------------------------------------------------------------------
Balance, beginning of period                                              $ 12,314    $ 10,567    $ 11,635    $  9,180
Changes in nonowner sources                                                  1,078         409       1,820         467
Dividends                                                                      (99)       (157)       (163)       (428)
Changes in additional paid-in capital                                            -           2           1       1,602
----------------------------------------------------------------------------------------------------------------------
Balance, end of period                                                    $ 13,293    $ 10,821    $ 13,293    $ 10,821
======================================================================================================================
</TABLE>

            See Notes to Condensed Consolidated Financial Statements.

                                       5

<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                           INCREASE (DECREASE) IN CASH
                                   (UNAUDITED)
                                 ($ in millions)

<TABLE>
<CAPTION>
                                                                            SIX MONTHS ENDED
                                                                                JUNE 30,
                                                                            2003        2002
----------------------------------------------------------------------------------------------
<S>                                                                       <C>         <C>
NET CASH PROVIDED BY/(USED IN) OPERATING ACTIVITIES                       $    274    $    (22)
----------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
     Proceeds from maturities of investments
              Fixed maturities                                               3,227       2,112
              Equity Securities                                                  -          11
              Mortgage loans                                                   128         124
     Proceeds from sales of investments
              Fixed maturities                                               6,064       8,335
              Equity securities                                                 67          28
              Real estate held for sale                                          5          13
     Purchases of investments
              Fixed maturities                                             (11,350)    (12,891)
              Equity securities                                               (105)        (10)
              Mortgage loans                                                  (127)       (165)
     Policy loans, net                                                          15          26
     Short-term securities (purchases) sales, net                              (60)        439
     Other investment sales, net                                               126         104
     Securities transactions in course of settlement, net                       24        (252)
----------------------------------------------------------------------------------------------
     Net cash used in investing activities                                  (1,986)     (2,126)
----------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
     Contractholder fund deposits                                            4,186       4,941
     Contractholder fund withdrawals                                        (2,334)     (2,439)
     Capital contribution by parent                                              -         172
     Dividends to parent company                                              (163)       (428)
----------------------------------------------------------------------------------------------
     Net cash provided by financing activities                               1,689       2,246
----------------------------------------------------------------------------------------------
Net increase (decrease) in cash                                                (23)         98
Cash at beginning of period                                                    186         146
----------------------------------------------------------------------------------------------
Cash at end of period                                                     $    163    $    244
==============================================================================================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
     Interest paid                                                        $      1    $      1
     Income taxes paid                                                    $    305    $    274
==============================================================================================
</TABLE>

            See Notes to Condensed Consolidated Financial Statements.

                                       6

<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.       BASIS OF PRESENTATION

         The Travelers Insurance Company (TIC, together with its subsidiaries,
         the Company), is a wholly owned subsidiary of Citigroup Insurance
         Holding Corporation (CIHC), an indirect wholly owned subsidiary of
         Citigroup Inc. (Citigroup). Citigroup is a diversified global financial
         services holding company whose businesses provide a broad range of
         financial services to consumer and corporate customers around the
         world. The condensed consolidated financial statements and accompanying
         footnotes of the Company are prepared in conformity with accounting
         principles generally accepted in the United States of America (GAAP)
         and are unaudited. The preparation of financial statements in
         conformity with GAAP requires management to make estimates and
         assumptions that affect the reported amounts of assets and liabilities
         and disclosure of contingent assets and liabilities at the date of the
         financial statements and the reported amounts of revenues and benefits
         and expenses during the reporting period. Actual results could differ
         from those estimates.

         The Company's two reportable business segments are Travelers Life &
         Annuity and Primerica Life Insurance. The primary insurance entities of
         the Company are TIC and its subsidiaries The Travelers Life and Annuity
         Company (TLAC), included in the Travelers Life & Annuity segment, and
         Primerica Life Insurance Company (Primerica Life) and its subsidiaries,
         Primerica Life Insurance Company of Canada, CitiLife Financial Limited
         (CitiLife) and National Benefit Life Insurance Company (NBL), included
         in the Primerica Life Insurance segment. The condensed consolidated
         financial statements include the accounts of the insurance entities of
         the Company and Tribeca Citigroup Investments Ltd., among others, on a
         fully consolidated basis.

         In the opinion of management, the interim financial statements reflect
         all adjustments necessary (all of which were normal recurring
         adjustments) for a fair presentation of results for the periods
         reported. The accompanying condensed consolidated financial statements
         should be read in conjunction with the consolidated financial
         statements and related notes included in the Company's Annual Report on
         Form 10-K for the year ended December 31, 2002. The condensed
         consolidated balance sheet as of December 31, 2002 was derived from the
         audited balance sheet included in the Form 10-K.

         Certain financial information that is normally included in annual
         financial statements prepared in accordance with GAAP, but is not
         required for interim reporting purposes, has been condensed or omitted.

         Certain prior year amounts have been reclassified to conform to the
         2003 presentation.

2.       ACCOUNTING STANDARDS

         CHANGES IN ACCOUNTING PRINCIPLES

         COSTS ASSOCIATED WITH EXIT OR DISPOSAL ACTIVITIES

         On January 1, 2003, the Company adopted the Financial Accounting
         Standards Board (FASB) Statement of Financial Accounting Standards
         (SFAS) No. 146, "Accounting for Costs Associated with Exit or Disposal
         Activities" (FAS 146). FAS 146 requires that a liability for costs
         associated with exit or disposal activities, other than in a business
         combination, be recognized when the liability is incurred. Previous
         generally accepted accounting principles provided for the recognition
         of such costs at the date of management's commitment to an exit plan.
         In addition, FAS 146 requires that the liability be measured at fair
         value and be adjusted for changes in estimated cash flows. The
         provisions of the new standard are effective for exit or

                                       7

<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                   (CONTINUED)

         disposal activities initiated after December 31, 2002. The adoption of
         FAS 146 did not affect the Company's consolidated financial statements.

         STOCK-BASED COMPENSATION

         On January 1, 2003, the Company adopted the fair value recognition
         provisions of Statement of Financial Accounting Standards No. 123,
         "Accounting for Stock-Based Compensation" (FAS 123), prospectively for
         all awards granted, modified, or settled after January 1, 2003. The
         prospective method is one of the adoption methods provided for under
         FAS No. 148, "Accounting for Stock-Based Compensation - Transition and
         Disclosure," issued in December 2002. FAS 123 requires that
         compensation cost for all stock awards be calculated and recognized
         over the service period (generally equal to the vesting period). This
         compensation cost is determined using option pricing models, intended
         to estimate the fair value of the awards at the grant date. Similar to
         Accounting Principles Board Opinion No. 25, "Accounting for Stock
         Issued to Employees," the alternative method of accounting, an
         offsetting increase to stockholders' equity under FAS 123 is recorded
         equal to the amount of compensation expense charged.

         Had the Company applied FAS 123 in accounting for Citigroup stock
         option plans for all options granted, net income would have been the
         pro forma amounts indicated below:

<TABLE>
<CAPTION>
                                                      SECOND QUARTER    YEAR-TO-DATE
                                                      --------------    ------------
IN MILLIONS OF DOLLARS                                2003     2002     2003    2002
                                                      ----     ----     ----    ----
<S>                                                   <C>      <C>      <C>     <C>
Compensation expense related to        As reported    $  -     $  -     $  -    $  -
   stock option plans, net of tax      Pro forma         2        3        3       5

Net income                             As reported     315      222      676     543
                                       Pro forma       313      219      673     538
</TABLE>

         ACCOUNTING STANDARDS NOT YET ADOPTED

         CONSOLIDATION OF VARIABLE INTEREST ENTITIES

         In January 2003, the FASB released FASB Interpretation No. 46,
         "Consolidation of Variable Interest Entities" (FIN 46). This
         Interpretation changes the method of determining whether certain
         entities should be included in the Company's consolidated financial
         statements. An entity is subject to FIN 46 and is called a variable
         interest entity (VIE) if it has (1) equity that is insufficient to
         permit the entity to finance its activities without additional
         subordinated financial support from other parties, or (2) equity
         investors that cannot make significant decisions about the entity's
         operations, or that do not absorb the expected losses or receive the
         expected returns of the entity. All other entities are evaluated for
         consolidation under FAS No. 94, "Consolidation of All Majority-Owned
         Subsidiaries." A VIE is consolidated by its primary beneficiary, which
         is the party involved with the VIE that has a majority of the expected
         losses or a majority of the expected residual returns or both.

         The provisions of FIN 46 are to be applied immediately to VIEs created
         after January 31, 2003, and to VIEs in which an enterprise obtains an
         interest after that date. For VIEs in which an enterprise holds a
         variable interest that it acquired before February 1, 2003, FIN 46
         applies in the first fiscal period beginning after June 15, 2003. For
         any VIEs that must be consolidated under FIN 46 that were created
         before February 1, 2003, the assets, liabilities and noncontrolling
         interest of the VIE would be initially measured at their carrying
         amounts with any difference between the net amount added to the balance
         sheet and any previously recognized interest being recognized as the
         cumulative effect of an accounting change. If determining the

                                       8

<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                   (CONTINUED)

         carrying amounts is not practicable, fair value at the date FIN 46
         first applies may be used to measure the assets, liabilities and
         noncontrolling interest of the VIE.

         The Company has investments in entities that may be considered to be
         variable interests. The carrying value of these investments is
         approximately $2.4 billion and primarily consists of interests in
         security investment funds in the amount of $905 million and real estate
         investment funds in the amount of $315 million, below investment grade
         asset-backed and mortgage-backed securities and equity investments in
         the amount of $1.2 billion, and a collateralized bond obligation in the
         amount of $4 million.

         The Company continues to evaluate the impact of applying FIN 46 to
         entities acquired before February 1, 2003; however, at this time, it is
         anticipated that the effect on the Company's consolidated balance
         sheets is not expected to increase assets and liabilities by more than
         $1 billion. No entities were created between February 1, 2003 and June
         30, 2003 that would require application of FIN 46.

         DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

         In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement
         133 on Derivative Instruments and Hedging Activities" (FAS 149). FAS
         149 amends and clarifies accounting for derivative instruments,
         including certain derivative instruments embedded in other contracts,
         and for hedging activities under SFAS No. 133, "Accounting for
         Derivative Instruments and Hedging Activities." In particular, this
         Statement clarifies under what circumstances a contract with an initial
         net investment meets the characteristic of a derivative and when a
         derivative contains a financing component that warrants special
         reporting in the statement of cash flows. This Statement is generally
         effective for contracts entered into or modified after June 30, 2003
         and is not expected to have a material impact on the Company's
         financial statements.

         ACCOUNTING AND REPORTING BY INSURANCE ENTERPRISES FOR CERTAIN
         NONTRADITIONAL LONG-DURATION CONTRACTS AND FOR SEPARATE ACCOUNTS

         In July 2003, Statement of Position 03-01, "Accounting and Reporting by
         Insurance Enterprises for Certain Nontraditional Long-Duration
         Contracts and for Separate Accounts" (SOP 03-01) was released. SOP
         03-01 provides guidance on accounting and reporting by insurance
         enterprises for separate account presentation, accounting for an
         insurer's interest in a separate account, transfers to a separate
         account, valuation of certain liabilities, contracts with death or
         other benefit features, contracts that provide annuitization benefits,
         and sales inducements to contract holders. SOP 03-01 is effective for
         financial statements for fiscal years beginning after December 15,
         2003. The Company is currently evaluating the impact that SOP 03-01
         will have on its financial statements.

3.       INVESTMENTS

         The Company participates in dollar roll repurchase transactions as a
         way to generate investment income. These transactions involve the sale
         of mortgage-backed securities with the agreement to repurchase
         substantially the same securities from the same counterparty. Cash is
         received from the sale, which is invested in the Company's short-term
         money market pool. The cash is returned at the end of the roll period
         when the mortgage-backed securities are repurchased. The Company will
         generate additional investment income based upon the difference between
         the sale and repurchase prices.

                                       9

<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                   (CONTINUED)

         This transaction is recorded as a securitized borrowing. The
         mortgage-backed securities remain recorded as assets. The cash proceeds
         are reflected in short-term investments and a liability is established
         to reflect the Company's obligation to repurchase the securities at the
         end of the roll period.  The collateral amount is classified as Other
         Liabilities in the condensed consolidated balance sheets and was $887
         million and $.5 million at June 30, 2003 and December 31, 2002,
         respectively.

4.       OPERATING SEGMENTS

         The Company has two reportable business segments that are separately
         managed due to differences in products, services, marketing strategy
         and resource management. The business of each segment is maintained and
         reported through separate legal entities within the Company. The
         management groups of each segment report separately to the Company's
         ultimate parent, Citigroup.

         TRAVELERS LIFE & ANNUITY (TLA) core offerings include individual
         annuity, individual life, corporate owned life insurance (COLI) and
         group annuity insurance products distributed by TIC and TLAC
         principally under the Travelers Life & Annuity name. Among the range of
         individual products offered are fixed and variable deferred annuities,
         payout annuities and term, universal and variable life insurance. The
         COLI product is a variable universal life product distributed through
         independent specialty brokers. The group products include institutional
         pensions, including guaranteed investment contracts, payout annuities,
         group annuities sold to employer-sponsored retirement and savings plans
         and structured finance funding agreements. The majority of the annuity
         business and a substantial portion of the life business written by TLA
         are accounted for as investment contracts, with the result that the
         deposits collected are reported as liabilities and are not included in
         revenues.

         The PRIMERICA LIFE INSURANCE business segment consolidates primarily
         the business of Primerica Life, Primerica Life Insurance Company of
         Canada, CitiLife and NBL. The Primerica Life Insurance business segment
         offers individual life products, primarily term insurance, to customers
         through a sales force of approximately 108,000 agents. A great majority
         of the domestic licensed sales force works on a part-time basis. NBL
         also provides statutory disability benefit insurance and other
         insurance, primarily in New York, as well as direct response student
         term life insurance nationwide. CitiLife was established in September
         2000 to underwrite insurance in Europe. Primerica Life, directly or
         through its subsidiaries, is licensed or otherwise authorized to sell
         and market term life insurance in all 50 states, the District of
         Columbia, Puerto Rico, Guam, the U.S. Virgin Islands, Northern Mariana
         Islands, Canada, the United Kingdom and Spain.

                                       10

<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                   (CONTINUED)

BUSINESS SEGMENT INFORMATION:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
AT AND FOR THE THREE MONTHS ENDED                                TRAVELERS LIFE &   PRIMERICA LIFE
JUNE 30, 2003 ($ in millions)                                         ANNUITY          INSURANCE      TOTAL
------------------------------------------------------------------------------------------------------------
<S>                                                              <C>                <C>              <C>
Premiums                                                             $   191            $   307      $   498
Net investment income                                                    673                 78          751
Interest credited to contractholders                                     314                  -          314
Amortization of deferred acquisition costs                                64                 57          121
Total expenditures for deferred acquisition costs                        132                 98          230
Federal income taxes on operating income (1)                              67                 55          122
Operating income (2)                                                 $   209            $   107      $   316
Segment assets                                                       $80,904            $ 9,173      $90,077
------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
AT AND FOR THE THREE MONTHS ENDED                                TRAVELERS LIFE &   PRIMERICA LIFE
JUNE 30, 2002 ($ in millions)                                         ANNUITY         INSURANCE       TOTAL
------------------------------------------------------------------------------------------------------------
<S>                                                              <C>                <C>              <C>
Premiums                                                             $   244            $   296      $   540
Net investment income                                                    664                 70          734
Interest credited to contractholders                                     301                  -          301
Amortization of deferred acquisition costs                                43                 55           98
Total expenditures for deferred acquisition costs                        146                 88          234
Federal income taxes on operating income (1)                              91                 53          144
Operating income (2)                                                 $   238            $   103      $   341
Segment assets                                                       $73,496            $ 8,263      $81,759
------------------------------------------------------------------------------------------------------------
</TABLE>

(1)      Excludes taxes on realized investment gains (losses).

(2)      Excludes realized gains or losses, net of tax, and is a non-GAAP
         measure. See discussion of non-GAAP measures under Item 2.

BUSINESS SEGMENT RECONCILIATION:

<TABLE>
<CAPTION>
----------------------------------------------------------------------------
FOR THE THREE MONTHS ENDED
JUNE 30,  ($ in millions)                                     2003     2002
----------------------------------------------------------------------------
<S>                                                          <C>      <C>
INCOME:
Total operating income of segments                           $ 316    $ 341
Realized investment losses, net of tax                          (1)    (119)
----------------------------------------------------------------------------
      Net Income                                             $ 315    $ 222
============================================================================
</TABLE>

         The majority of the annuity business and a substantial portion of the
         life business written by TLA are accounted for as investment contracts,
         with the result that the deposits collected are reported as liabilities
         and are not included in revenues. Deposits represent an operating
         statistic integral to managing TLA operations, which management uses
         for measuring business volumes, and may not be comparable to similarly
         captioned measurements used by other life insurance companies. For the
         three months ended June 30, 2003 and 2002, deposits amounted to $2.6
         billion and $3.9 billion, respectively.

                                       11

<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                   (CONTINUED)

BUSINESS SEGMENT INFORMATION:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED                                         TRAVELERS LIFE &   PRIMERICA LIFE
JUNE 30, 2003 ($ in millions)                                         ANNUITY          INSURANCE      TOTAL
------------------------------------------------------------------------------------------------------------
<S>                                                              <C>                <C>              <C>
Premiums                                                             $   352            $   614      $   966
Net investment income                                                  1,359                156        1,515
Interest credited to contractholders                                     622                  -          622
Amortization of deferred acquisition costs                               132                113          245
Total expenditures for deferred acquisition costs                        250                186          436
Federal income taxes on operating income (1)                              99                109          208
Operating income (2)                                                 $   463            $   212      $   675
Segment assets                                                       $80,904            $ 9,173      $90,077
------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED                                         TRAVELERS LIFE &   PRIMERICA LIFE
JUNE 30, 2002 ($ in millions)                                         ANNUITY          INSURANCE      TOTAL
------------------------------------------------------------------------------------------------------------
<S>                                                              <C>                <C>              <C>
Premiums                                                             $   370            $   590      $   960
Net investment income                                                  1,282                143        1,425
Interest credited to contractholders                                     583                  -          583
Amortization of deferred acquisition costs                                65                108          173
Total expenditures for deferred acquisition costs                        294                162          456
Federal income taxes on operating income (1)                             178                102          280
Operating income (2)                                                 $   447            $   198      $   645
Segment assets                                                       $73,496            $ 8,263      $81,759
------------------------------------------------------------------------------------------------------------
</TABLE>

(1)      Excludes taxes on realized investment gains (losses).

(2)      Excludes realized gains or losses, net of tax, and is a non-GAAP
         measure. See discussion of non-GAAP measures under Item 2.

BUSINESS SEGMENT RECONCILIATION:

<TABLE>
<CAPTION>
---------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED
JUNE 30, ($ in millions)                                     2003    2002
---------------------------------------------------------------------------
<S>                                                          <C>     <C>
INCOME:
Total operating income of segments                           $ 675   $ 645
Realized investment gains (losses), net of tax                   1    (102)
---------------------------------------------------------------------------
      Net Income                                             $ 676   $ 543
===========================================================================
</TABLE>

         The majority of the annuity business and a substantial portion of the
         life business written by TLA are accounted for as investment contracts,
         with the result that the deposits collected are reported as liabilities
         and are not included in revenues. Deposits represent an operating
         statistic integral to managing TLA operations, which management uses
         for measuring business volumes, and may not be comparable to similarly
         captioned measurements used by other life insurance companies. For the
         six months ended June 30, 2003 and 2002, deposits amounted to $5.7
         billion and $7.0 billion, respectively.

                                       12

<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                   (CONTINUED)

5.       SHAREHOLDER'S EQUITY

         Statutory capital and surplus of the Company was $6.9 billion at
         December 31, 2002. The Company is currently subject to various
         regulatory restrictions that limit the maximum amount of dividends
         available to be paid to its parent without prior approval of insurance
         regulatory authorities. A maximum of $966 million is available by the
         end of the year 2003 for such dividends without prior approval of the
         State of Connecticut Insurance Department, depending upon the amount
         and timing of the payments. TLAC may not pay a dividend to TIC without
         such approval. Primerica Life may pay up to $148 million in dividends
         to TIC in 2003 without prior approval of the Massachusetts Insurance
         Department. Primerica Life paid $35 million and $110 million in
         dividends to TIC during the six months ended June 30, 2003 and 2002,
         respectively. The Company paid $163 million and $428 million in
         dividends to its parent during the six months ended June 30, 2003 and
         2002, respectively.

6.       COMMITMENTS AND CONTINGENCIES

         The Company is a defendant or co-defendant in various litigation
         matters in the normal course of business. These include civil actions,
         arbitration proceedings and other matters arising in the normal course
         of business out of activities as an insurance company, a broker and
         dealer in securities or otherwise. In the opinion of the Company's
         management, the ultimate resolution of these legal proceedings would
         not be likely to have a material adverse effect on the Company's
         consolidated results of operations, financial condition or liquidity.

         The Company is a member of the Federal Home Loan Bank of Boston (the
         "Bank"), and in this capacity has entered into a funding agreement (the
         "agreement") with the Bank where a blanket-lien has been granted to
         collateralize the Bank's deposits. The Company maintains control of
         these assets, and may use, commingle, encumber or dispose of any
         portion of the collateral as long as there is no event of default and
         the remaining qualified collateral is sufficient to satisfy the
         collateral maintenance level. The agreement further states that upon
         any event of default, the Bank's recovery is limited to the amount of
         the member's outstanding funding agreement. The amount of the Company's
         liability for funding agreements with the Bank as of June 30, 2003 is
         $800 million, included in contractholder funds.

                                       13

<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Management's narrative analysis of the results of operations is presented in
lieu of Management's Discussion and Analysis of Financial Condition and Results
of Operations, pursuant to General Instruction H(2)(a) of Form 10-Q.

The Company's Annual Report on Form 10-K, its quarterly reports on Form 10-Q and
any current reports on Form 8-K, and all amendments to these reports, are
available on the Citigroup website at http://www.citigroup.com by selecting the
"Investor Relations" page and selecting "SEC Filings."

CONSOLIDATED OVERVIEW ($ in millions)

<TABLE>
<CAPTION>
                                            FOR THE THREE MONTHS  FOR THE SIX MONTHS
                                               ENDED JUNE 30,        ENDED JUNE 30,
                                               2003      2002       2003     2002
                                              -------   ------     ------   -------
<S>                                           <C>      <C>        <C>       <C>
Revenues                                      $ 1,421  $ 1,260    $ 2,828   $ 2,568
Insurance benefits and interest credited          753      770      1,476     1,433
Operating expenses                                232      189        467       368
                                              -------   ------     ------   -------
     Income before taxes                          436      301        885       767
Income taxes                                      121       79        209       224
                                              -------   ------     ------   -------
Net income                                        315      222        676       543
Realized investment
  portfolio (gains)/losses, after-tax               1      119         (1)      102
                                              -------   ------     ------   -------
Net income before realized investment
  portfolio gains/(losses) (1)                $   316  $   341    $   675   $   645
                                              =======  =======    =======   =======
</TABLE>

(1) Net income before realized investment portfolio gains/(losses) is a non-GAAP
measure. The Company believes that this presentation of income, which management
uses internally to measure performance, is useful to investors because it
enhances the understanding of ongoing operations and the underlying trends of
the business. The timing of realized investment portfolio gains and losses can
be significantly impacted by both discretionary and other economic factors and
therefore management believes it is important to understand the impact of
realized investment gains and losses in order to evaluate current operating
trends.

The Travelers Insurance Company (TIC, together with its subsidiaries, the
Company), is comprised of two business segments, Travelers Life & Annuity and
Primerica Life Insurance.

Net income increased 42% to $315 million for the quarter ended June 30, 2003
from $222 million in the prior year quarter, primarily related to increased
revenues due to higher investment income, favorable business volumes and lower
net after-tax realized investment losses, partially offset by higher deferred
acquisition costs (DAC) amortization. Net income included net after-tax realized
investment losses of $1 million and $119 million in the second quarter of 2003
and 2002, respectively. Included in these net after-tax realized investment
losses are impairments of investments primarily in the fixed income portfolio,
in the amount of $26 million and $180 million, net of tax, in the second quarter
of 2003 and 2002, respectively. These impairments were offset by gains on sales
of fixed maturities. The second quarter 2002 losses were primarily related to
the impairment of investments in debt securities of WorldCom Inc. in the amount
of $126 million, net of tax. Net income before realized investment portfolio
losses decreased 7% to $316 million in the second quarter of 2003 from $341
million in the prior year period, primarily related to higher DAC amortization
and interest credited, partially offset by higher investment income and
favorable business volumes.

                                       14

<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

Net income for the six months ended June 30, 2003 increased 24% to $676 million,
from $543 million, primarily related to current year net after-tax realized
investment gains and prior year investment losses, and a $39 million tax benefit
related to an adjustment to the Dividends Received Deduction (DRD) in the first
quarter of 2003, partially offset by higher DAC amortization. Net after-tax
realized investment gains were $1 million for the six months ended June 30, 2003
and losses were $102 million for the prior year period, primarily related to the
second quarter 2002 impairment of investments in debt securities of WorldCom
Inc. in the amount of $126 million, after-tax. Net income before realized
investment gains (losses) increased 5% to $675 million from $645 million,
reflecting higher investment income and favorable business volumes.

The following discussion presents in more detail each business segment's
performance.

TRAVELERS LIFE & ANNUITY

<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED JUNE 30,                    2003   2002
($ in millions)                                        ----   ----
<S>                                                  <C>      <C>
Revenues                                             $ 1,012  $ 878
Insurance benefits and interest credited                 624    641
Operating expenses                                       118     81
                                                     -------  -----
          Income before taxes                            270    156
Income taxes                                              64     30
                                                     -------  -----
Net income                                               206    126
Realized investment portfolio losses                       3    112
                                                     -------  -----
Net income before realized
  investment portfolio gains/(losses) (1)            $   209  $ 238
                                                     =======  =====
</TABLE>

(1)      Net income before realized investment portfolio gains/(losses) is a
         non-GAAP measure. The Company believes that this presentation of
         income, which management uses internally to measure performance, is
         useful to investors because it enhances the understanding of ongoing
         operations and the underlying trends of the business. The timing of
         realized investment portfolio gains and losses can be significantly
         impacted by both discretionary and other economic factors and therefore
         management believes it is important to understand the impact of
         realized investment gains and losses in order to evaluate current
         operating trends.

Travelers Life & Annuity (TLA) core offerings include individual annuity,
individual life, corporate owned life insurance (COLI) and group annuity
insurance products distributed by TIC and The Travelers Life and Annuity Company
(TLAC) principally under the Travelers Life & Annuity name. Among the range of
individual products offered are fixed and variable deferred annuities, payout
annuities and term, universal and variable life insurance. These products are
primarily distributed through CitiStreet Retirement Services, Smith Barney
Financial Consultants, Primerica Financial Services, Citibank, and a nationwide
network of independent agents and the growing outside broker dealer channel. The
COLI product is a variable universal life product distributed through
independent specialty brokers. The group products include institutional
pensions, including guaranteed investment contracts (GICs), payout annuities,
group annuities sold to employer-sponsored retirement and savings plans and
structured finance funding agreements. The majority of the annuity business and
a substantial portion of the life business written by TLA are accounted for as
investment contracts, with the result that the deposits collected are reported
as liabilities and are not included in revenues.

TLA's business is significantly affected by movements in the U.S. equity and
fixed income credit markets. U.S. equity and credit market events can have both
positive and negative effects on the deposit, revenue and policy retention
performance of the business. A sustained weakness in the equity markets will
decrease revenues and earnings in variable products. Declines in credit quality
of issuers will have a negative effect on earnings. These statements are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act. See "Forward-Looking Statements" on page 21.

                                       15

<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES


Net income of $206 million in the second quarter of 2003 increased 63% from $126
million, primarily related to increased revenues due to higher investment
income, favorable business volumes and lower net after-tax realized investment
losses, partially reduced by higher DAC amortization. Net after-tax realized
investment losses were $3 million and $112 million for the second quarter of
2003 and 2002, respectively, primarily related to the second quarter 2002
impairments of investments in debt securities of WorldCom Inc. in the amount of
$122 million, after-tax. Net income before realized investment losses was $209
million in the second quarter of 2003 compared to $238 million in the second
quarter of 2002. The 12% decrease in 2003 reflects higher DAC amortization and
interest credited, partially offset by higher investment income and favorable
business volumes.

Net investment income (NII) increased $9 million to $673 million for the second
quarter of 2003 from $664 million in the second quarter of 2002. This increase
was driven by a larger invested asset base from increased business volumes,
which helped offset deterioration in fixed income yields. Equity investment
returns also contributed to the NII growth as a result of risk arbitrage
activity in the Company's trading portfolio.

The following table shows net written premiums and deposits by product type for
the quarters ended June 30, 2003 and 2002. The majority of the annuity business
and a substantial portion of the life business written by TLA are accounted for
as investment contracts, such that the premiums are considered deposits and are
not included in revenues. Deposits represent an operating statistic integral to
managing TLA operations, which management uses for measuring business volumes,
and may not be comparable to similarly captioned measurements used by other life
insurance companies.

FOR THE THREE MONTHS ENDED JUNE 30,

<TABLE>
<CAPTION>
                                             2003                2002
IN MILLIONS OF DOLLARS                Premiums  Deposits  Premiums  Deposits
                                      --------  --------  --------  --------
<S>                                   <C>       <C>       <C>       <C>
Individual annuities
    Fixed                              $   -    $   177     $   -    $   399
    Variable                               -        953         -      1,105
    Individual payout                      5          6         6          7
                                       -----    -------     -----    -------
Total individual annuities                 5      1,136         6      1,511
Group annuities                          152      1,209       201      2,149
Individual life insurance:
    Direct periodic premiums &
      deposits                            36        150        35        142
    Single premium deposits                -         80         -         72
    Reinsurance                          (11)       (23)       (8)       (20)
                                       -----    -------     -----    -------
Total individual life insurance           25        207        27        194
Other                                      9          -        10          -
                                       -----    -------     -----    -------
              Total                    $ 191    $ 2,552     $ 244    $ 3,854
                                       =====    =======     =====    =======
</TABLE>

Individual annuity deposits of $1.1 billion in the second quarter of 2003
decreased 27% from $1.5 billion in the second quarter of 2002, reflecting a
decline in fixed annuity sales due to competitive pressures and lower variable
annuity sales due to current equity market conditions. Individual annuity
account balances increased 6% to $29.8 billion at June 30, 2003, from $28.1
billion at June 30, 2002, reflecting market appreciation in the second quarter
of 2003, plus good in-force retention.

Group Annuity written premiums decreased 24% to $152 million, primarily related
to a decrease in sales of employer-sponsored payout plans. Deposits (excluding
Citigroup's employee pension plan deposits) of $1.2 billion in the second
quarter of 2003 were down 44% from $2.1 billion in the comparable period of
2002, which reflects lower guaranteed investment contract (GIC) sales, both
fixed and variable. The fixed GIC decrease primarily related to the absence of
significant European Medium Term Note transactions, while the variable GIC sales
decrease was market related. These GIC decreases were partially offset by strong
structured settlement sales. Group Annuity account balances and benefits
reserves reached $23.6 billion at June 30, 2003, up 5% from

                                       16

<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

$22.5 billion at June 30, 2002. This volume growth reflects 2003 first quarter
fixed GIC production and continued strong retention in all products.

Deposits for the life insurance business were $207 million in the second quarter
of 2003, up 7% from $194 million in the comparable period of 2002, driven by
stronger single premium sales, higher direct periodic deposits and lower COLI
sales. Life insurance in force was $84.8 billion at June 30, 2003, up from $82.3
billion at December 31, 2002.

In the second quarter of 2003, TLA operating expenses increased 46% from the
prior year quarter primarily due to volume-related insurance expenses, and an
increase of $21 million in DAC amortization. Amortization expense has increased
due to a higher amortization rate resulting from the decrease in market value of
individual annuity account balances. The amortization of capitalized DAC is a
significant component of TLA expenses. TLA's recording of DAC varies based upon
product type. DAC for deferred annuities, both fixed and variable, and payout
annuities employs a level yield methodology. DAC for universal life and COLI are
amortized in relation to estimated gross profits, with traditional life,
including term insurance and other products, amortized in relation to
anticipated premiums.

PRIMERICA LIFE INSURANCE

<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED JUNE 30,           2003    2002
($ in millions)                               ----    ----
<S>                                          <C>     <C>
Revenues                                     $ 409   $ 382
Insurance benefits                             129     129
Operating expenses                             114     108
                                             -----   -----
     Income before taxes                       166     145
Income taxes                                    57      49
                                             -----   -----
Net income                                     109      96
Realized investment
  portfolio (gains)/losses                      (2)      7
                                             -----   -----
Net income before realized
  investment portfolio gains/(losses) (1)    $ 107   $ 103
                                             =====   =====
</TABLE>

(1)      Net income before realized investment portfolio gains/(losses) is a
         non-GAAP measure. The Company believes that this presentation of
         income, which management uses internally to measure performance, is
         useful to investors because it enhances the understanding of ongoing
         operations and the underlying trends of the business. The timing of
         realized investment portfolio gains and losses can be significantly
         impacted by both discretionary and other economic factors and therefore
         management believes it is important to understand the impact of
         realized investment gains and losses in order to evaluate current
         operating trends.

The Primerica Life Insurance business segment offers individual life products,
primarily term insurance, to customers through a sales force of approximately
108,000 agents. A great majority of the domestic licensed sales force works on a
part-time basis.

Net income of $109 million in the second quarter of 2003 increased 14% from $96
million. Included in net income are current year realized investment gains of $2
million and prior year investment losses of $7 million in the second quarter of
2003 and 2002, respectively. The prior year losses were primarily due to
impairment of investments in debt securities of WorldCom Inc. Net income before
realized investment portfolio gains (losses) was $107 million in the second
quarter of 2003 compared to $103 million in the second quarter of 2002. The 4%
improvement in 2003 reflects growth in life insurance in force and volume
related investment income.

Total life insurance in force reached $486.6 billion at June 30, 2003, up from
$466.8 billion at December 31, 2002, reflecting good in-force policy retention
and higher volume of sales. The face amount of new term life insurance sales was
$20.9 billion for the three-month period ended June 30, 2003, compared to $20.8
billion for the prior year period.

                                       17

<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

NII increased 11% to $78 million in the second quarter of 2003 from the prior
year quarter, primarily related to a larger invested asset base, offset by lower
yields.

The amortization of capitalized DAC, which increased to $57 million in the
second quarter of 2003 from $55 million in the second quarter of 2002, is a
significant component of Primerica Life's expenses. All of Primerica Life's DAC
is associated with term insurance products, which are amortized in relation to
anticipated premiums. Amortized DAC has remained level as a percentage of direct
premiums. The increase in the amount of amortization over 2002 is associated
with growth in sales and in-force business.

Earned premiums net of reinsurance were $307 million in the second quarter of
2003 compared to $297 million in the prior year period, including $290 million
and $280 million, respectively, for Primerica Life individual term life
policies.

TRAVELERS LIFE & ANNUITY

<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30,              2003     2002
($ in millions)                                ----     ----
<S>                                          <C>      <C>
Revenues                                     $ 2,007  $ 1,786
Insurance benefits and interest credited       1,211    1,170
Operating expenses                               239      146
                                             -------  -------
      Income before taxes                        557      470
Income taxes                                      97      123
                                             -------  -------
Net income                                       460      347
Realized investment portfolio losses               3      100
                                             -------  -------
Net income before realized
   investment portfolio gains/(losses) (1)   $   463  $   447
                                             =======  =======
</TABLE>

(1)      Net income before realized investment portfolio gains/(losses) is a
         non-GAAP measure. The Company believes that this presentation of
         income, which management uses internally to measure performance, is
         useful to investors because it enhances the understanding of ongoing
         operations and the underlying trends of the business. The timing of
         realized investment portfolio gains and losses can be significantly
         impacted by both discretionary and other economic factors and therefore
         management believes it is important to understand the impact of
         realized investment gains and losses in order to evaluate current
         operating trends.

Net income for the six months ended June 30, 2003 increased 33% to $460 million
from $347 million from the prior year period, primarily related to lower net
after-tax realized investment losses, and a $39 million tax benefit related to
an adjustment to the DRD in the first quarter of 2003, partially offset by
higher DAC amortization. Net after-tax realized investment losses were $3
million and $100 million for the six months ended June 30, 2003 and 2002,
respectively, primarily related to the second quarter 2002 impairment of
investments in debt securities of WorldCom Inc. in the amount of $122 million,
after tax. Net income before realized investment portfolio losses increased 4%
to $463 million from $447 million, reflecting higher investment income and
favorable business volumes. The DRD benefit reduced the effective tax rate from
26% for the prior year six month period ending June 30, 2002 to 17% in the
current year six month period ending June 30, 2003.

The following table shows net written premiums and deposits by product type for
the six months ended June 30, 2003 and 2002. The majority of the annuity
business and a substantial portion of the life business written by TLA are
accounted for as investment contracts, such that the premiums are considered
deposits and are not included in revenues. Deposits represent an operating
statistic integral to managing TLA operations, which management uses for
measuring business volumes, and may not be comparable to similarly captioned
measurements used by other life insurance companies.

                                       18

<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30,               2003                2002
IN MILLIONS OF DOLLARS                   Premiums  Deposits  Premiums  Deposits
                                         --------  --------  --------  --------
<S>                                      <C>       <C>       <C>       <C>
Individual annuities
    Fixed                                  $   -    $   316   $   -    $   775
    Variable                                   -      1,756       -      2,199
    Individual payout                         15         16      12         14
                                           -----    -------   -----    -------
Total individual annuities                    15      2,088      12      2,988
Group annuities                              269      3,203     285      3,590
Individual life insurance:
    Direct periodic premiums &
      deposits                                69        326      68        342
    Single premium deposits                    -        129       -        148
    Reinsurance                              (18)       (46)    (14)       (40)
                                           -----    -------   -----    -------
Total individual life insurance               51        409      54        450
Other                                         17          -      19          -
                                           -----    -------   -----    -------
          Total                            $ 352    $ 5,700   $ 370    $ 7,028
                                           =====    =======   =====    =======
</TABLE>

Individual annuity deposits of $2.1 billion in the first six months of 2003
decreased 30% from $3.0 billion in the prior year period, reflecting a decline
in fixed annuity sales due to competitive pressures and lower variable annuity
sales due to current equity market conditions.

Group Annuity written premiums decreased 6% to $269 million for the first six
months of 2003, compared to the 2002 period, primarily related to a decrease in
sales of employer-sponsored payout plans. Deposits (excluding Citigroup's
employee pension plan deposits) of $3.2 billion in the first six months of 2003
were down 11% from $3.6 billion in the comparable period of 2002, which reflects
lower guaranteed investment contract (GIC) sales, both fixed and variable. The
fixed GIC decrease primarily related to the absence of significant European
Medium Term Note transactions, while the variable GIC sales decrease was market
related. These GIC decreases were partially offset by strong structured
settlement sales.

Deposits for the life insurance business were $409 million in the first six
months of 2003, down 9% from $450 million in the comparable period of 2002,
driven by weaker single premium sales, lower direct periodic deposits and lower
COLI sales, primarily occurring in the first quarter.

For the first six months of 2003, TLA operating expenses increased 64% from the
comparable prior year six-month period, primarily due to an increase of $67
million of DAC amortization. Amortization has increased due to a higher
amortization rate resulting from the decrease in market value of individual
annuity account balances. Also, during the first quarter of 2002, TLA had a
one-time decrease in DAC amortization of $22 million related to changes in the
underlying lapse and interest rate assumptions in the individual annuity
business. The amortization of capitalized DAC is a significant component of TLA
expenses. TLA's recording of DAC varies based upon product type. DAC for
deferred annuities, both fixed and variable, and payout annuities employs a
level yield methodology. DAC for universal life and COLI are amortized in
relation to estimated gross profits, with traditional life, including term
insurance and other products amortized in relation to anticipated premiums.

                                       19

<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

PRIMERICA LIFE INSURANCE

<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30,               2003    2002
                                                ----    ----
<S>                                            <C>     <C>
($ in millions)
Revenues                                       $ 821   $ 782
Insurance benefits                               265     263
Operating expenses                               228     222
                                               -----   -----
     Income before taxes                         328     297
Income taxes                                     112     101
                                               -----   -----
Net income                                       216     196
Realized investment
  portfolio (gains)/losses                        (4)      2
                                               -----   -----
Net income before realized
  investment portfolio gains/(losses) (1)      $ 212   $ 198
                                               =====   =====
</TABLE>

(1)      Net income before realized investment portfolio gains/(losses) is a
         non-GAAP measure. The Company believes that this presentation of
         income, which management uses internally to measure performance, is
         useful to investors because it enhances the understanding of ongoing
         operations and the underlying trends of the business. The timing of
         realized investment portfolio gains and losses can be significantly
         impacted by both discretionary and other economic factors and therefore
         management believes it is important to understand the impact of
         realized investment gains and losses in order to evaluate current
         operating trends.

Net income for the six months ended June 30, 2003 increased 10% to $216 million
from $196 million for the six months ended June 30, 2002. Excluding after-tax
realized investment gains (losses) of $4 million and $(2) million for the 2003
and 2002 six-month periods, respectively, net income before realized investment
gains (losses) increased 7% to $212 million in 2003, compared to $198 million in
2002.

NII increased 9% to $156 million for the six months of 2003 from the prior year,
primarily related to a larger invested asset base, offset by lower yields.

The amortization of capitalized DAC, which increased to $113 million in the
first six months of 2003 from $108 million in the prior year period, is a
significant component of Primerica Life's expenses. All of Primerica Life's DAC
is associated with term insurance products, which are amortized in relation to
anticipated premiums. Amortized DAC has remained level as a percentage of direct
premiums. The increase in the amount of amortization over 2002 is associated
with growth in sales and in-force business.

Earned premiums net of reinsurance were $614 million in the first six months of
2003 compared to $591 million in the prior year period, including $582 million
and $559 million, respectively, for Primerica Life individual term life
policies.

INSURANCE REGULATIONS

Risk-based capital requirements are used as minimum capital requirements by the
National Association of Insurance Commissioners and the states to identify
companies that merit further regulatory action. At December 31, 2002, the
Company had adjusted capital in excess of amounts requiring any regulatory
action.


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                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

The Company is subject to various regulatory restrictions that limit the maximum
amount of dividends available to be paid to its parent without prior approval of
insurance regulatory authorities in the state of domicile. A maximum of $966
million is available by the end of 2003 for such dividends without prior
approval of the State of Connecticut Insurance Department, depending upon the
amount and timing of the payments. TLAC may not pay a dividend to TIC without
such approval. Primerica Life may pay up to $148 million in dividends to TIC
without prior approval of the Massachusetts Insurance Department. Primerica Life
paid $35 million and $110 million in dividends to TIC during the six months
ended June 30, 2003 and 2002, respectively. The Company paid $163 million and
$428 million in dividends to its parent during the six months ended June 30,
2003 and 2002, respectively.

OTHER DEVELOPMENTS

On May 28, 2003, the Jobs and Growth Tax Relief Reconciliation Act of 2003 was
enacted into law. This act makes various changes in individual tax rates. Most
significantly, the legislation extends the 15% maximum capital gains tax rate to
corporate dividends received by individuals, including dividends received by
mutual funds and passed through to mutual fund shareholders. The legislation
also lowers the capital gains tax rate and accelerates the individual income tax
rate reductions enacted in 2001. These changes could have a negative impact on
demand for life and annuity products. This statement is a forward-looking
statement within the meaning of the Private Securities Litigation Reform Act.
See "Forward-Looking Statements" on this page.

FUTURE APPLICATIONS OF ACCOUNTING STANDARDS

See Note 2 of Notes to Condensed Consolidated Financial Statements for a
discussion of recently issued accounting pronouncements.

FORWARD-LOOKING STATEMENTS

Certain of the statements contained herein that are not historical facts are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act. The Company's actual results may differ materially from
those included in the forward-looking statements. Forward-looking statements are
typically identified by the words "believe," "expect," "anticipate," "intend,"
"estimate," "may increase," "may fluctuate," and similar expressions, or future
or conditional verbs such as "will," "should," "would," and "could." These
forward-looking statements involve risks and uncertainties including, but not
limited to, regulatory matters, and the resolution of legal proceedings.

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                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

ITEM 4.  CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

The Company's management, with the participation of the Company's Chief
Executive Officer and Chief Financial Officer, has evaluated the effectiveness
of the Company's disclosure controls and procedures (as such term is defined in
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as
amended ("Exchange Act")) as of the end of the period covered by this report.
Based on such evaluation, the Company's Chief Executive Officer and Chief
Financial Officer have concluded that, as of the end of such period, the
Company's disclosure controls and procedures are effective in recording,
processing, summarizing and reporting, on a timely basis, information required
to be disclosed by the Company in the reports that it files or submits under the
Exchange Act.

INTERNAL CONTROL OVER FINANCIAL REPORTING

There have not been any changes in the Company's internal control over financial
reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act) during the fiscal quarter to which this report relates that have
materially affected, or are reasonably likely to materially affect, the
Company's internal control over financial reporting.

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<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

                           PART II - OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) EXHIBITS

EXHIBIT NO.           DESCRIPTION

   3.01        Charter of The Travelers Insurance Company (the "Company"), as
               effective October 19, 1994, incorporated by reference to Exhibit
               3.01 to the Company's Quarterly Report on Form 10-Q for the
               fiscal quarter ended September 30, 1994 (File No. 33-33691) (the
               "Company's September 30, 1994 10-Q").

   3.02        By-laws of the Company, as effective October 20, 1994,
               incorporated by reference to Exhibit 3.02 to the Company's
               September 30, 1994 10-Q.

  31.01+       Certification of chief financial officer pursuant to Section 302
               of the Sarbanes-Oxley Act of 2002.

  31.02+       Certification of chief executive officer pursuant to Section 302
               of the Sarbanes-Oxley Act of 2002.

  32.01+       Certification pursuant to 18 U.S.C. Section 1350 as adopted
               pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(b) REPORTS ON FORM 8-K

None

----------
+Filed herewith

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                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                          THE TRAVELERS INSURANCE COMPANY
                                          -------------------------------
                                                  (Registrant)

Date August 14, 2003                 /s/ Glenn D. Lammey
                                     -----------------------------------
                                     Glenn D. Lammey
                                     Executive Vice President,
                                     Chief Financial Officer and Chief
                                     Accounting Officer (Principal Financial
                                     Officer and Principal Accounting Officer)

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